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Pro-Growth, Fiscally prudent, Pro-Farmer and Pro- Middle Class Budget Featured

Published in General Friday, 01 February 2019 15:26

 

 

The Interim Budget 2019-20 presented, by the interim  Union Minister Piyush Goyal. provides a major Scheme for the farmers, it provides tax sops and sets the Developmental Agenda for the years to come. 

A New Deal for 12 Crore Small and Marginal farmers with direct income support, a path breaking Pension initiative for 10 Crore unorganized sector workers, exempting income up to Rs 5 lakhs from Income Tax, reforms in stamp duty, highest ever budgetary allocation of Rs 3 lakh crore for Defence, record allocation of funds at Rs 58,166 crore for North Eastern Areas, a new AIIMS for Haryana, single window clearance for Indian film makers at par with foreigners and higher budgetary allocations for Education, Health, Infrastructure and for the welfare of weaker sections including Scheduled Castes and Scheduled Tribes, a Separate Department of Fisheries for welfare of 1.5 crore fisherman are some of the major highlights of the Interim Budget 2019-20.

Major Schemes

New Scheme- namely “Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)” to extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land upto 2 hectares is announced.

While presenting the Interim Budget 2019-20, the Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal said that “our Government is launching a historic programme PM-KISAN with an outlay of Rs.75,000 crore for the FY 2019-20 and Rs.20,000 crore in the Revised Estimates of FY 2018-19”.

Under this Government of India funded Scheme, Rs.2,000 each will be transferred to the bank accounts of around 12 crore Small and Marginal farmer families, in three equal installments. This programme would be made effective from 1st December 2018 and the first installment for the period upto31st March 2019 would be paid during this year itself, Shri Piyush Goyal said.

 

To provide sustained and focused attention towards development of Fisheries, the  Government has decided to create a separate Department of Fisheries. Finance Minister said that through the measure, the Government wants to promote further growth over 7% to promote livelihood of about 1.45 crore people dependent on the sector.

The Finance Minister announced 2% interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card. Further, in case of timely repayment of loan, they will also get an additional 3% interest subvention.

 

Allocation of Rs.750 crore for Rashtriya Gokul Mission has been announced for the current year itself. Setting up of “Rashtriya Kamdhenu Aayog” to upscale sustainable genetic upgradation of cow resources and to enhance production and productivity of cows has also been announced. The Aayog will also look after effective implementation of laws and welfare schemes for cow.

 

To provide pensionary benefits to at least 10 crore labourers and workers in the unorganised sector a new Scheme called ‘Pradhan Mantri Shram-Yogi Maandhan’ is announced.  The Finance Minister said that within next five years it would be one of the largest pension schemes of the world. A sum of Rs.500 crore has been allocated for the Scheme. Additional funds will be provided as needed, Shri Goyal added. The scheme will also be implemented from the current year, he said.

Tax Benefits

Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax. The Finance Minister said that persons having gross income up to Rs. 6.50 lakhs are not required to pay any income tax if they make investments in provident funds, specified savings and insurance etc. Additional deductions such as interest on home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.

For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000. This will provide additional tax benefit of Rs. 4,700 crore to more than 3 crore salary earners and pensioners.

Exemption on levy of income tax on notional rent on a second self-occupied house is also now proposed. Currently, income tax on notional rent is payable if one has more than one self-occupied house.

TDS threshold on interest earned on bank/post office deposits is being raised from Rs. 10,000 to Rs. 40,000.

TDS threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs.2,40,000 for providing relief to small taxpayers.

 

The Finance Minister says that the Government wants the GST burden on home buyers to be reduced and accordingly the GST Council was moved to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest.

Shri Goyal said that soon, businesses comprising over 90% of GST payers will be allowed to file quarterly return.

Inflation

The Finance Minister said that the Government has been successful in bringing down average inflation to 4.6% over last five years, which is lower than the inflation during the tenure of any other Government. In fact Inflation in December 2018 was down to 2.19% only. Shri Goyal said if we had not controlled inflation, our families would have been spending around 35-40% more today on basic necessities such as food, travel, consumer durables, housing etc. The average rate of inflation during previous five years 2009-2014 was a backbreaking 10.1%, he pointed out.

 

Fiscal Deficit

The fiscal deficit has been brought down to 3.4% in 2018-19 RE from the high of almost 6% seven years ago, the Finance Minister mentioned.  He said, the Current Account Deficit (CAD), against a high of 5.6% six years ago, is likely to be only 2.5% of GDP this year. “We contained the fiscal deficit notwithstanding the Finance Commission’s recommendations increasing the share of the States from 32% to 42% in central taxes, which we accepted in the true spirit of cooperative federalism, thereby transferring significantly higher amounts to the States”, Shri Goyal said.

Growth and FDI

The Finance Minister Shri Piyush Goyal stated that a stage for high growth in decades to come, has now been set, after a wave of next generation path breaking structural reforms over the last five years, including introduction of Goods and Services Tax (GST) and other taxation reforms.

The country witnessed its best phase of macro-economic stability during the last five years. “We are the fastest growing major economy in the world with an annual average GDP growth during last five years higher than the growth achieved by any Government since economic reforms began in 1991. From being the 11th largest economy in the world in 2013-14, we are today the 6th largest in the world”, the Finance Minister asserted in his Opening Remarks  of his Budget speech.

Shri Goyal said that due to such a stable and predictable regulatory regime, growing economy and strong fundamentals, India could attract massive amount of as much as $239 billion of Foreign Direct Investment (FDI) during the last 5 years, when most of the FDI was allowed to come in through the automatic route.

Enhanced allocations for major Schemes

Announcing an allocation of Rs.60,000 crores for MGNREGA for Budget Estimates 2019-20,  the Finance Minister said that additional allocations will be made, if required.

Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs.19,000 crore in BE 2019-20 as against Rs.15,500 crore in RE 2018-19. During the period 2014-18, a total number of 1.53 crore houses have been built under the Pradhan Mantri Awas Yojana, he announced.

By March, 2019, all households will be provided with electricity connection.  Till now, 143 crore LED bulbs have been provided in a mission mode which has resulted in saving of Rs.50,000 crore for the poor and middle class.

He said through the world’s largest healthcare programme, Ayushman Bharat, to provide medical treatment to nearly 50 crore people in the country,  around 10 lakh patients have already benefited through free treatment for medical treatment which would have otherwise cost them Rs. 3,000 crore. Lakhs of poor and middle class people are also benefiting from reduction in the prices of essential medicines, cardiac stents and knee implants, and availability of medicines at affordable prices through Pradhan Mantri Jan Aushadhi Kendras, the Finance Minister added.

 

Piyush Goyal also said that 14 of the 21 AIIMS operating or being established in the country presently have been announced since 2014. He also announced setting up of a new – the 22nd AIIMS in Haryana.

 

Allocation for Integrated Child Development Scheme (ICDS) is being increased from Rs.23,357 crore in RE 2018-19 to Rs.27,584 crore in BE 2019-20.

A substantial increase is proposed in the allocation for welfare of the Scheduled Castes  and Scheduled Tribes. The allocation of  Rs.56,619 crore  made in BE of 2018-19 for Scheduled Caste, further increased to Rs.62,474 crore in RE is proposed to be enhanced to Rs.76,801 crore in BE for 2019-20, an increase of 35.6% over BE of 2018-19. For the Scheduled Tribes also, proposed allocation in 2019-20 BE is Rs.50,086 crore as against Rs.39,135 crore in BE 2018-19, an increase of 28%.

The Finance Minister said that a Welfare Development Board to frame special strategies for the benefit of the  hard-to-reach De-notified, Nomadic and Semi-Nomadic communities will be set up under the Ministry of Social Justice and Empowerment. He said that a Committee under NITI Aayog will also be set up to complete the task of identifying De-notified, Nomadic and Semi-Nomadic communities not yet formally classified.

 

Shri Goyal said under the Ujjwala Yojana aiming delivery  of 8 crore free LPG connections, more than 6 crore connections have already been given and the remaining will get free gas connections by next year.

 

The Finance Minister announced that a National Artificial Intelligence Portal will also be developed soon as a part of the National Programme on ‘Artificial Intelligence’.

 

The Department of Industrial Policy and Promotion will now be renamed as the Department for Promotion of Industries and Internal Trade.

The Finance Minister stated that the Government e-Marketplace (GeM), created by the present Government two years ago, resulted in average savings of 25-28% and the platform will now be extended to all CPSEs. Transactions of over Rs. 17,500 crore have taken place so far.

The Finance Minister announced that for the first time, the country’s Defence Budget will be of over Rs.3 lakh crore.   

The Finance Minister, Shri Piyush Goyal pointed-out that domestic air traffic passengers have doubled during the last five years, leading to large number of jobs also being created. The number of operational airports has crossed 100 with the commissioning of the Pakyong airport in Sikkim.  Arunachal Pradesh came on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.

 

Capital support from the budget for Indian Railways is proposed at Rs.64,587 crore in 2019-20 (BE). The Railways’ overall capital expenditure programme is of Rs. 1,58,658 crore. The Finance Minister, who is also holding the portfolio of Railway Ministry, announced that the Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE).

 

 

India’s installed solar generation capacity has grown over ten times in last five years. Stating this, Shri Goyal said that “our commitment to promote renewable energy is reflected in setting up the International Solar Alliance, the first treaty based international inter-governmental organisation headquartered in India. This sector is now creating lakhs of new age jobs, he added.

The Finance Minister announced that in Entertainment industry, which is a major employment generator, regulatory provisions will now rely more on self-declarations. To promote entertainment industry, the Single window clearance for ease of shooting films, now available only to foreigners, will also be made available to Indian filmmakers. “We will also introduce anti-camcording provisions in the Cinematograph Act to control the menace of piracy”, he said.

Saying that “We are poised to become a Five Trillion Dollar Economy in the next five years and aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter”, Shri Piyush Goyal said that there has been a Growth of 18% in Direct Tax Collections in 2017-18 and increase in tax base by as many as 1.06 crore people filing income tax returns for the first time in FY 2017-18, mainly on account of demonetization.

Shri Goyal said that he is proposing, through the Finance Bill, necessary amendments to levy Stamp duties on one instrument relating to one transaction and get collected at one place through the Stock Exchanges. The duty so collected will be shared with the State Governments seamlessly on the basis of domicile of buying client, he said.

In all the total expenditure is to increase from Rs.24,57,235 crore in 2018-19 RE to Rs.27,84,200 crore in 2019-20 BE.  A rise of Rs.3,26,965 crore or approximately 13.30%. This reflects a high increase considering low inflation. The fiscal deficit of year 2019-20 is estimated to be 3.4% of GDP.

 

The Finance Minister pointed out that after completion of the fiscal deficit consolidation programme, the Government would now focus on Debt consolidation. He said “We have maintained the glide path towards our target of 3% of fiscal deficit to be achieved by 2020-21. India’s Debt to GDP ratio was 46.5% in year 2017-18. The FRBM Act prescribes that the Debt to GDP ratio of the Government of India should be brought down to 40% by 2024-25. “Along with completion of the fiscal deficit consolidation programme, we will now focus on Debt consolidation”, he added.

 Budget 2019-20 India Income Tax Slab Rates Changes: Announcing the Interim Budget, acting finance minister Piyush Goyal on Friday proposed that inpiduals earning up to Rs 5 lakh would get a full tax rebate. This will provide tax saving of up to Rs 12,500 for all taxpayers in this bracket. Those who save more can effectively push this rebate up to an income of Rs 6.5 lakh

Since this is a rebate and not a slab change, it will not impact the tax incidence of those with larger incomes though it will have some impact for those whose salaries are under Rs 10 lakh as they can add home loans and tuition fees to get additional benefits.

Goyal also announced that interest income of up to Rs 40,000 will attract no tax. However, he left its implementation to the next government for the full-fledged Budget after the Lok Sabha elections.

Goyal also said standard deduction would be raised from Rs 40,000 to Rs 50,000. Finance Minister Arun Jaitley had in Budget 2018 introduced a standard deduction of Rs. 40,000 for the salaried class. This additional deduction was proposed in lieu of existing deductions of Rs 15,000 for medical reimbursement and Rs 19,200 for transport allowance.

Goyal further said the tax interface would be made simpler, resulting in an increase in tax collections and return filings. The Union minister said tax scrutiny would be done electronically and there will be no interaction between the tax authority and the taxpayer.

"Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials. All income tax returns to be processed within 24 hours and refunds to be issued simultaneously," Goyal said.

He said direct tax collections were up from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore. He said the tax base was also up from Rs 3.79 crore to Rs 6.85 crore.

                                                Reactions

 

Udaya Bhaskar Rao Abburu, CEO & Managing Director, iRam Technologies

 

We welcome the budget! It is a people focus budget. Our honourable standing finance minister Piyush Goyal announced the series of measures in Budget 2019 - 20 to promote AI and infrastructure, and we as a company are looking forward to its future scope.

iRAM would be standing with Goyal’s initiative to build next-gen infrastructure physical as well as social for a $10 trillion economy and to provide Ease of Living. This will also mean opportunities for the smart city venture and companies like iRAM. We will be working closely with the government to make basic facility available like smart parking solutions, smart lighting solutions, infrastructure etc.

Also, the announcement to build a Digital India that reaches every citizen by creating innumerable start-ups and jobs, will give a major impetus to the smart city initiative. National centre for artificial intelligence is under consideration. Along with that a national AI portal will be developed soon, and this is a very welcome step for IoT enabled companies like iRAM.

Vikas Singh, Managing Director, Pearson India.

 

“The Government has presented a pro-citizen budget with emphasis on the taxation, rural economy, education, agriculture and infrastructure. We welcome the increased budgetary allocation towards National Education Mission. The government’s focus on digitilsation of villages is a step in the right direction and will propel digital education in rural India. The residual income from the increased tax benefit will also help in allocation of spends towards child education. We welcome the efforts of Finance Minister in spearheading development and the allocation of resources towards education, skilling and job creation.“

 Amit Shah, BJP President 

The budget has met the expectations of farmers, labourers & middle class. By bearing a cost of Rs 75,000 crore,the govt will implement Pradhan Mantri Kisan Samman Nidhi scheme. This scheme will also benefit those farmers who do not take loans.

Union Minister Dharmendra Pradhan

 Opposition has no issues to talk about, they are scared of Modi Ji’s welfare schemes. We don’t do votebank politics, we do development politics. We are dedicated to take Indian farmers to new heights.

Home Minister Rajnath Singh

 It’s a historic budget, and all the sections of the society will benefit from it.

 Union Transport Minister Nitin Gadkari

Heartiest congratulations to Hon'ble PM Sri @narendramodi ji, Sri @arunjaitley ji and @PiyushGoyal ji. This budget is for the welfare of every section of the society as per our mission of 'Sabka Saath Sabka Vikas'. #BudgetForNewIndia

 

Dr. Sanjay Gupta

Vice-Chancellor, World University of Design

 

“Overall, the Interim Budget is focused on people, progress & prosperity and that will lead to the rise of a #NewIndia by 2022. Being an election focused budget, there was no big announcement for the education sector which requires a long term focus. The reduction in the interest on education loans is a good move towards ensuring education for all. At the same time, the allocation for Higher Education Financing Agency (HEFA) has been reduced from Rs 2,750 crore last year to Rs 2,100 crore this year. More focused announcements around skilling and higher education for youth would have made the Budget more holistic.”

 

  

Prashant Gupta

Executive Director, Sharda University

 

“Reflecting our Government's great commitment to harness the potential of our students/youth and empower their future, the investment of Rs 38, 572 Cr under the National Education Mission, is indeed a welcome move. The initiative of deduction in the interest on education loans will make education accessible to all. Additionally, the government’s push towards new-age technologies like Artificial Intelligence will impart necessary skills and knowledge to the younger generation and will help in  preparing the workforce of future.”

 

 

Ramaswamy Venkatachalam, Managing Director – India at FIS (worldwide leader in Financial Technology software, services, and solutions)  

 

The Union Budget 2019-20 has given a huge boost to middle class population of the country by providing tax rebate to individuals earning up to Rs 5 lakh per annum. This will indeed persuade people to purchase more goods and services, which in turn will boost overall digital banking transactions. The government’s proposal to connect 1 lakh villages with digital services in the next five years will definitely drive financial inclusion in the country and boost digital banking in the economy. The JAM (short for Jan Dhan-Aadhaar-Mobile) trinity is already making good progress, and with this move we are at the cusp of a digital revolution that will create opportunities for Fintech companies. We are already witnessing a surge in digital payments in urban areas, the trend is likely to expand in remote parts of the country through easy availability of data services. The government has also envisaged to create a Digital India reaching every sector of the economy, every corner of the country and impacting the life of all Indians. We believe this budget has laid the foundation for the next digital uprising in the country.

 

 

 

Last modified on Saturday, 02 February 2019 16:12

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